Income Tax Alert: Link Pan With Aadhaar Before May 31 To Avoid Higher TDS, Here's How To Do Online And Offline

The Income Tax Department has issued a crucial reminder for all taxpayers: link your Permanent Account Number (PAN) with your Aadhaar Card before Friday, May 31. Failure to comply will result in higher Tax Deductions at Source (TDS). This announcement was made via the social media platform X, emphasising the importance of this linkage to avoid financial penalties.

High Number of Unlinked PANs

As of January 29, 2024, official data revealed that 11.48 crore PANs were not linked to Aadhaar. The government collected Rs 601.97 crore in penalties from July 1, 2023, to January 31, 2024, due to late linking. Minister of State for Finance Pankaj Chaudhary highlighted these figures in a written reply to the Lok Sabha.

Important Notice from the Income Tax Department

The Income Tax Department's social media post stated, "Kind Attention Taxpayers, Please link your PAN with Aadhaar before May 31st, 2024, if you haven't already, to avoid tax deduction at a higher rate. Please refer to CBDT Circular No.6/2024 dtd 23rd April, 2024," it stated.

Linking PAN and Aadhaar is important to prevent higher tax deductions under Section 206AA and 206CC of the Income Tax Act, 1961. This directive applies to transactions entered into before March 31, 2024.

Consequences of Not Linking PAN with Aadhaar

The Income Tax Department has repeatedly stressed the necessity of linking PAN with Aadhaar. If you fail to do so by the deadline, your PAN will become inoperative. This means no tax refunds will be issued, and any tax refunds due will not accrue interest for the period during which the PAN is inactive. Additionally, TDS and tax collected at source (TCS) will be deducted at a higher rate.

Who Needs to Link Aadhaar and PAN?

Under Section 139AA of the Income Tax Act, every individual allotted a PAN as of July 1, 2017, and eligible to obtain an Aadhaar number must link the two. Your PAN will become inoperative if not linked with Aadhaar by June 30, 2023. However, individuals in the exempted category will not face these penalties.

How to Link Aadhaar with PAN

• Visit the Income Tax e-filing portal: Go to the official website and click on ¡®Link Aadhaar Status¡¯ under the quick links.
• Enter PAN and Aadhaar details: Provide your PAN and Aadhaar numbers and click ¡®View Link Aadhaar Status¡¯.
• Link your Aadhaar: If not already linked, a pop-up will prompt you to link them. Enter your PAN, Aadhaar number, name as on Aadhaar, and mobile number.
• Validate details: Check the box if only the birth year is mentioned on your Aadhaar card, and agree to validate your Aadhaar details. Click on ¡®Link Aadhaar¡¯.
• Complete CAPTCHA and OTP verification: Enter the CAPTCHA code. An OTP will be sent to your registered mobile number for validation. Click the validate button to complete the process.
• Pay the linking fee: Note that a fine of Rs 1,000 is required to link Aadhaar with PAN.

Also Read: New Financial Year, New Rules: PAN-Aadhaar Linking Deadline And FASTag KYC Mandate Updates

How to Check PAN-Aadhaar Link Status

• Visit the Income Tax e-filing portal: Go to www.incometax.gov.in.
• Quick Links: Click on the 'Quick Links' option on the homepage.
• Check Link Status: Click on ¡®Link Aadhaar status¡¯ and provide your PAN and Aadhaar numbers.
• Verify Status: A message will confirm if your PAN is already linked to Aadhaar. If not, the pop-up will guide you to link them.

Linking PAN-Aadhaar via SMS

• Send an SMS: From your mobile device, send an SMS to 567678 or 56161. Use the format UIDPAN<10-digit PAN><12-digit Aadhaar>.
• Receive Confirmation: You will receive an SMS confirming the PAN-Aadhaar link status. The linking is successful only if the taxpayer¡¯s date of birth matches on both documents.

How to Link PAN with Aadhaar Offline

Taxpayers can also visit a PAN Service Provider or an Aadhaar enrollment center to help with the linking process. This provides an alternative for those who prefer not to complete the process online.

By following these steps, you can ensure your PAN and Aadhaar are linked, avoiding any penalties or higher tax deductions. Stay compliant and avoid unnecessary hassles by linking your PAN with Aadhaar today.

FAQs on Linking PAN with Aadhaar

Q. Why do I need to link my PAN with Aadhaar?

Linking your PAN with Aadhaar is mandatory as per the Income Tax Department regulations. Failing to link the two can lead to your PAN becoming inoperative, which results in higher tax deductions (TDS) and no tax refunds or interest on refunds.

Q. What is the deadline for linking PAN with Aadhaar?

The deadline to link your PAN with Aadhaar is May 31, 2024. Ensure you complete the process before this date to avoid penalties and higher tax deductions.

Q. What happens if I don't link my PAN with Aadhaar by the deadline?

If you do not link your PAN with Aadhaar by May 31, 2024, your PAN will become inoperative. This means higher tax deductions at source (TDS), no refunds or interest on refunds, and potential penalties.

Q. Is there a fee for linking PAN with Aadhaar?

Yes, there is a fee of Rs 1,000 to link your PAN with Aadhaar.

Q. Who is exempt from linking PAN with Aadhaar?

Individuals who fall under the exempted category as per the government regulations do not need to link their PAN with Aadhaar. This generally includes individuals who are non-residents, aged 80 years or above, and citizens of specific states.

Q. Can I still link my PAN with Aadhaar after the deadline?

While you can link your PAN with Aadhaar after the deadline, your PAN will remain inoperative until linked. This means you will face higher TDS and other penalties until the linkage is complete.

Q. What should I do if there is a discrepancy between my PAN and Aadhaar details?

If there is a discrepancy in your PAN and Aadhaar details, you need to correct them either through the Aadhaar update service or by updating your PAN details. Ensure that all details match before linking.

Q. Will I get a notification once my PAN is linked with Aadhaar?

Yes, once the linking process is complete, you will receive a confirmation message on your registered mobile number and email ID.

Q. What are the consequences of having an inoperative PAN?

• An inoperative PAN means:
• Higher TDS deductions.
• No refunds will be issued.
• No interest will be paid on refunds for the period when the PAN is inactive.
• Difficulty in conducting financial transactions that require a valid PAN.

Q. Can I unlink my PAN from Aadhaar once it is linked?

No, once your PAN is linked with Aadhaar, it cannot be unlinked. The process is permanent as per the current regulations.

Q. How long does it take to link PAN with Aadhaar online?

The online linking process is usually immediate but can take a few days for the update to reflect in the system. Ensure all details are accurate to avoid delays.

Disclaimer:

This article is for informational purposes only and should not be considered as financial or legal advice. Please consult with a qualified tax professional or the Income Tax Department for personalised guidance and to ensure compliance with all current laws and regulations. The information provided is based on the latest available data and may be subject to change.

Also Read: Missed The Aadhaar-PAN Deadline? Govt Collects Rs 600 Crore As Penalties From Defaulters